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Thursday, 22 May 2014 14:29

Jindal, New Orleans and Louisiana budget woes

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new-orleans-tourismThe City of New Orleans is facing a deficit that Mayor Mitch Landrieu is now trying to cover with increased hotel taxes, property taxes, and cigarette taxes. At the same time, rumor has it that experienced police officers are fleeing the force. At the state level, legislators are also missing money; if they were to look to Gov. Jindal for a solution, there would look at an empty chair.

 These are some the topics that were discussed during the second part of the WGSO radio show/Google Hangout with Jeff Crouere and Stephen Sabludowsky on Tuesday. Below is a transcription of the discussion. 

Crouere: I talked to a police officer yesterday. He's leaving; guy with 33 years of experience tells me a lot of experienced police officers are leaving. I think that's going to be more and more of a problem. I don't see it turning around any time soon. I asked this officer what the numbers are. He said the real number is less than a thousand. So we're getting false information. We could be getting false statistics. I think this crime problem could be really intensifying the days ahead unless something dramatic is done soon.

Sabludowsky: Sure, and especially if you're looking at a 35-45 million dollar obligation that we have, the city has, that at this point is not funded. Those are the fourth court-ordered judgments. So, you know...

Crouere: Here's what the Mayor tried to do. He had a trio of taxes: hotel tax, he had a property tax, and he had a cigarette tax. City proposed; I don't think any of them are going anywhere in the legislature. So that's going to be a challenge for him as a Mayor.

Sabludowsky: So what do you cut? Cut his salary. I understand about the issues in salaries. I think that would be a good way of going; symbolic, if anything. But what else do you cut? The cops? I haven't looked at the budget. I don't know the budget, but what do you cut?

Crouere: Well, it looks to me that you can start with cutting the deputy mayors and rescinding all the salary increases. That might save you a few million. From there, you try to whittle it down little by little and find whatever kind of efficiencies you can. I know that it is a challenge, but I don't think the legislature is going to go with the tax increases. I don't think that's the route to take. Also, I'm wondering, Steve, the tourism industry, let's talk about that for a second. It's not a good signal to send to the NFL or anybody else about coming to New Orleans if you're going to have the highest hotel taxes in the country, is it?

Sabludowsky: No, it's not. Definitely not. You're making a good point; it's not. If we have confidence in voters, shouldn't the state legislature give the cities and the parishes the right to decide their own fate? I'm not endorsing these taxes; that's not what I'm saying. I'm just saying that, shouldn't the cities be able to control their own destinies? The Mayor has a real problem. Not only are we at the bare bones, but now he's got that 35-45 million dollars in addition. Where's the money going to come from?

Crouere: If I'm not mistaken; correct me if I'm wrong. He has instituted fee increases on various water bills, sewage bills, other types of revenue mechanisms that he has at his disposal. Maybe he'll throw out more red light cameras out there. Maybe he'll put more parking meters out. There are ways he can jack up taxes that he does already have at his disposal.

Sabludowsky: Sure. Maybe he can hire the same firm that Bobby Jindal has hired to come up with ways to cut government. You saw what happened yesterday. The Secretary of Revenue tried to convince the Committee to accept the proposals that this group who advised the Governor, and they said no. We can't estimate the revenues based on maybes and what ifs. So I don't know. I don't know the answer. I don't.

Crouere: Let me ask you this. What is a real situation as far as the budget? I've heard conflicting numbers. It seems like it's a big mystery. I'm also reading this morning that the administration may need to borrow money just to fund these higher education facilities. So what are we really looking at here?

Sabludowsky: I got to tell you, I really don't know. I don't think the legislators know at this point in time. There are some people who really do feel that we will have a special session in the fall or in the spring because we still have the Medicaid issue hovering over our head.

Crouere: What do we do with the charity hospitals now that this financing mechanism had been turned down by the feds?

Sabludowsky: I don't get it. I know our Governor just wrote a piece that was published by Fox News yesterday. He said that he knows a little bit about healthcare. Yeah, look at his healthcare program! It is in a mess!

Crouere: Hang on with us, Steve. Let's keep this rolling. I'd like to get to some more calls. Steve, one more issue I want to throw on the table and then get back to the calls. We're six weeks to go until the current fiscal year ends and two weeks until the legislative session adjourns. Seems like now you got the State Treasury Department saying the Jindal administration may need to take out another loan to continue to pay for expenses of our colleges and universities. What do you know about this?

Sabludowsky: Pretty much what you know about it, to be honest. This would be the third loan, and I think the Jindal administration is saying that they'll pay by the end of July. Do they have some money coming in? I'm as flumoxed about this as anybody. This is the administration that said that we should pay our bills, not take out loans and mortgages. So...

Crouere: Well, it's just another indication of what kind of fiscal trouble we're in, right?

Sabludowsky: Yeah. As I understand, and this is what I'm getting from both sides - the supporters and those people who are not supporting him. That is that the economy is doing well; 4.5% in terms of unemployment. But just like nationwide, you got to factor in those people who have just given up. But still Louisiana is doing better than all other Southern states, and I think we're number 6 in the nation in terms of unemployment. But nobody can find the jobs.

Crouere: It's interesting. It's a tale of two statistics, I guess. Chief Executive Magazine also ranked Louisiana number 9 in the nation for business. Texas was ranked number 1. It's been number 1 for ten years in a row. People were saying, "Hey, that's a sign that we're now becoming more receptive to business in the state." Yet it seems to be that, again, we see major corporations that don't really have headquarters here. I don't know. I guess we're getting some improvement as far as the business climate, but I think we're still losing more people than we have coming. I think our out-migration still is greater than our in-migration.

Sabludowsky: There was something in the legislature that, I think, we're losing four members of the faculty per day. I think that tells you..and the point being that the private sector may be doing better and hopefully is doing better. But the money is not coming into state government. So despite our cuts - we're cut to the bone - and have cut way beyond what Jindal wants us to cut - but the money is not there. In a year, in two years, according to everything I have heard and people I've talked to, we're looking at two billion dollars. When Bobby leaves and goes to Washington, the rest of us are going to be paying the bills.

Crouere: Speaking of Bobby leaving: today, I think he's in Florida to speak to the American Federation for Children. Yesterday, he was in New York for a meeting of the Republican Governors Association. So he is still the high-flying, traveling man, isn't he?

Sabludowsky: Yeah. He can do very well once he leaves office as a columnist, a travel agent. Secretary of Transportation, as Gov. Edwin Edwards said. His future is quite bright. Hopefully, the people of Louisiana has a bright future, too. It's hard to tell. Right now, government future is not bright. I think everybody will agree with that.

Bayoubuzz Staff

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